[darryl]

Originally Posted by JSWolf

The problem is that the price fix 6 got together to set agency pricing because they wanted to punish Amazon. But what they totally screwed up on was the fact that Amazon sold eBooks for Kindles and most other eBook stores did not. Also, if you had a Reader that was using RMSDK (ADE) then you were not buying from Amazon. So by going Agency, it did not suddenly get Kindle users to shop at other stores. They couldn't because Kindles don't do ePub. All they did was screw up eBook pricing for everyone and they didn't do a damn thing to Amazon.

Interestingly put, but not without a great deal of truth. Though I must disagree that they didn't do a damn thing to Amazon. They helped Amazon a great deal whilst hurting only themselves. In many cases they had enjoyed all the benefits of a sales volume appropriate to $9.99 at a much higher price point, with Amazon making up the difference. Their naive price fixing plan fell foul of the law, and they lost agency for a time and had to pay out compensation. When the court imposed restrictions expired they again demanded agency, and Amazon obliged. Then, with control of their own prices, they retarded their ebook sales. Some of these sales were lost to Indie ebooks. Guess who sold most of these Indie ebooks? Some of these lost sales did indeed go to print books, as they wished. Guess who sold most of the print books? Even discounted them, sometimes resulting in the price of a hard cover being less than the price of the ebook?

They were never going to damage Amazon. Amazon still sells their ebooks and print books, and they cannot withhold supply. In the meantime, Amazon has created a huge market which even Carolyn Reidy, CEO of Simon & Schuster acknowledges, as summarised from Mike Shatzkin's blog:

Two observations from Reidy seemed extremely important to take on board. One is that self-publishing is taking a growing share of the market. She characterized the self-publishing share in America as “huge, no matter what statistics you use.”

The second observation referred to, from the same source, is:

“The romance market, which used to be huge in mass market, has pretty much dried up and gone to digital original. [And] it has put pressure on pricing of all ebooks…. Those are consumers who, if they wanted a book, they used to come to us, and now they go elsewhere."

Despite these words, I see no evidence in the Big Five's actions even now that they have the first clue about how to deal with this. They started off by thinking of Indie/Self Publishing as some sort of vanity press, with their own books of such superior quality that they are in effect a separate market which need not compete. That may even have been largely true then, but not now. Many readers who tried Indie when the conspiracy ebook pricing prevailed never came back, myself included. Attempted differentiation on quality grounds has clearly failed to a significant extent, and continues to lose ground. In my view this is Amazon's greatest victory, in which they have been assisted greatly by the Big 5's strategy and tactics. Amazon is no longer dependent on the Big 5 for supply. It now controls a large and growing sector of the market in which the Big 5 do not share at all. At the same time it continues to take the lion's share of sales of Big 5 books, both ebook and physical. The lack of vision and the determination to protect the old business model at all costs has lead to the situation where Amazon is having its cake and eating it too. Any effective opposition is I think doomed if it relies only on Big 5 books. I see no evidence of any effective counter-strategy at this stage. It may well already be too late.